The Holidays are over and you may have depleted your savings accounts or used credit to finance your Christmas shopping. You may be asking, now what? Well to answer that let’s rewind a little bit and talk about overspending and why we tend to do it, especially during the holidays.
Did you overspend?
I’ve been there way too many times, but this year I followed what I’m laying out for you today.
Take a second to think about why you may have overspent. Overspending tends to occur for a variety of reasons.
- Not having a budget. Seriously, two-thirds of Americans do not have a budget. Why is that? What’s stopping them?
- Impulse. Impulse buying is in a lot of ways psychological Did you know those end caps in the stores are strategically placed? Usually, the items on the end caps are things you can find within the aisles really quickly, but have you taken a minute to notice those items are usually on “sale”?
- Emotional. Yes, emotional. Just take a second and channel your inner Don Draper. Companies spend billions on ad guys to do market research and create the perfect ad that will convert.
- Instant gratification. Whether you are out and about or bored often times overspending happens due to our need for instant gratification. Whether it’s food or a new toy it makes us think we are happy right now, at this moment.
- Keeping up with the Jones’. Do you have someone in your life you’re trying to impress or compete with?
- Using credit cards. “A new Gallup Poll shows that just over half of Americans have at least one credit card on which they do not pay off the full amount due each month, thus essentially using it for a short-term loan.”
- Thinking you got a deal. Have you been on Amazon lately? They have a hugely popular daily deals tab. Heck, they even bought out Woot, which is a daily deals site.
- Rewarding yourself at the wrong times. Rewarding yourself at the wrong times can lead to spending money you may not have. Make sure if you’re rewarding yourself you evaluate why and check your budget first.
- Under estimating your expenses. All too often people only think in terms of how much they bring in and not how much is going out.
- Thinking it’s normal to have debt.
So now that you know what some of the causes of overspending are you can move towards fixing it in the future.
So what do you do now?
- You have to start with setting up a plan for your income and expenses. In simple terms, it’s called a budget. You can learn all about that by joining my free email course here.
- Cut back on the entertainment. You can find so many ideas out there for no spend or budget-friendly entertainment. You can find some good ideas here and here.
- Assign every dollar in your bank account a home. Don’t let it just sit in your checking account ready for you to swipe your debit card.
- Set financial goals, both short and long-term.
- Remind yourself how much time you will have to put in to earn that money back that you want to spend. If you make 20 dollars per hour, how long will you need to work to earn that back?
- Training yourself to not be impulsive. Yes, this is hard but it can be done. For years I’ve given myself permission to shop on apps on my phone, however, I’ve never signed up for those companies in order to put my credit card information into the app. It’s like window shopping, but without the ability to buy.
Start your new year off right and kick the tendency to overspend to the curb. Putting these actions in place now can put you on a path to being prepared for the Holiday season next year. Save often and save early. I plan out my months in advance so I can see what’s coming up and where the money for those events need to come from.
You can take my free email course here on creating a financial plan for your family.
Fire off in the comments below and tell me how you get control of your budget and avoid overspending.
Until next time.
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Thanks for the shout out!!!
Awesome list!!! This sounds so cliche but it’s true, I cant go to the grocery store when I’m hungry otherwise I always overspend buying things that look good. I know that I need to go after I’ve eaten or when I’m not hungry in order to keep my spending down 🙂
I can’t even take my husband to the grocery store or we go over the budget by a lot! He knows he’s not allowed to go into the store when I shop for food.
I’m definitely in need of this after Christmas! I always say I’m not going to overspend and do it anyways!
I’m happy you stopped by! It’s so hard to break old habits but it can be done!! I hope you found some tips to use that will help for next time.
I am making it a goal to organize my finances in 2017! Starting off with a savings account allocated just for Christmas gifts. Planning to start early and add money into it every month, so hopefully by the time the holidays roll around next year I hope to have more than enough to spend on gifts!
I personally don’t start super early but I do start in September. It’s all about planning ahead though and forecasting out your income.
Keeping a budget has been key for my hubby and I. We paid off over $86K in debt in 5 years, even while adding 3 babies to the family, mostly due to budgeting.
That sounds amazing Carrie. I definitely look forward to living with less debt. Although the way I’ve set up our finances we aren’t struggling with it which is nice.
Ugh, I feel like you are talking right to me! Managing finances is not my strong suit. Thanks for the motivation.
Lynn,
I’m so happy you found some motivation in what I wrote. You can do it!!